1st Day: We will cover topics leading to the decision to proceed (or not) with the M&A transaction:

I. Initiate the due diligence process(baselining the target company)

1. Management interviews with the target company members:Creating an interview guide (introduction, questions to ask) and selecting members of the management to interview (e.g., CEO, CFO, other key employees)

2. Internal data collection:List of critical data (e.g., financial, organizational) to gather from the target company

3. External studies/plans/data collection:Inquisition and gathering of relevant external data/studies (e.g., market studies) including the ones previously commissioned by the target company

4. Initial hypotheses on the investment initiative: Forming an opinion for the market segments/growth trends, competitive landscape, other relevant trends (e.g., technology), company positioning and capabilities

II. Analyze the landscape

1. Assess market segments and growth trends

External interviews:Creating a list of industry experts, customers, other stakeholders to interview on market trends/expectations

Validation of market size and trends: Validating initial hypotheses on market size and growth trajectory through additional research and interviews

Validation of optimal business models: Determining the optimal business models that work in the target company’s industry

1. Form a final perspective on market, competitive landscape, relevant trends (e.g., technology)

2. Finalize comments/recommendations on current company strategic growth plans, company capabilities

3. Finalize the consensus on the proposed transaction (recommendation to proceed or not)

2nd Day: we will divide in groups and analyze two case studies with focus on telecom and energy industries. The groups, then, will present to their classmates.

Case Studies

I. Energy Industry (One of the below)

- SAGASCO Holdings Limited

In the summer of 1993, Australia's Trade Practices Commission was considering whether or not to permanently enjoin Santos Limited from acquiring SAGASCO Holdings Limited. This merger was potentially of enormous significance, since Santos was the largest and SAGASCO the third largest on-shore natural gas producer in Australia. SAGASCO, which was fighting the takeover, argued that the merger would significantly reduce competition in the natural gas market. Santos countered that the gas industry was highly concentrated already and had always been disciplined by competition from other fuels. This case is primarily intended to illustrate the analysis of the competitive effects of a merger, but it can also be used to discuss the relationship between competition policy and the regulation of natural monopolies.

- Atlantic Energy/Delmarva Power & Light (A):

Delmarva Power & Light and Atlantic Energy are neighboring electric utilities based in Delaware and New Jersey, respectively. In early 1996, they entered into merger negotiations, but were unable to reach an agreement on price because they could not agree on what impact deregulation would have on Atlantic. In the currently regulated electricity market, Atlantic was profitable even though it was one of the high-cost power producers in the region. But in a deregulated environment, where prices would surely fall, Atlantic might become unprofitable and, therefore, worth significantly less. The key issues are to determine how much to pay for Atlantic and how to structure a deal that will bridge the disagreements over value. Unlike certain situations where hedging can resolve uncertainty, there is no way to hedge either the speed of deregulation or the magnitude of price declines due to competition.

II. Telecommunications (One of the below)

- AT&T/McCaw Merger Negotiation:

Set in September 1992, this exercise provides teams of students the opportunity to negotiate terms of a merger between AT&T and McCaw Cellular. AT&T, one of the largest U.S. corporations, was the dominant competitor in long-distance telephone communications in the United States. McCaw was the largest competitor in the rapidly growing cellular-telephone communications industry. Prior to the negotiations, AT&T had no position in cellular communications. This case and its companion (F-1143) are designed to allow students to be assigned roles to play. The case may pursue some or all of the following teaching objectives: exercising valuation skills, practicing strategic analysis, exercising bargaining skills, and illustrating practical aspects of mergers and acquisitions.

- Amtelecom Group Inc.:

The CEO of Amtelecom Group Inc. (AGI) must make a recommendation to the board of directors regarding the best way to sell its Amtelecom Communications subsidiary. AGI owns and operates ICS Courier, a national fixed-route courier business, and Amtelecom Communications, a regional telecommunications, cable television, and Internet business. Amtelecom Communication's capital requirements are not being satisfied because cash is being diverted to ICS Courier to cover its losses. In addition, AGI's stock has been performing poorly. To alleviate these problems, the board has decided to sell off Amtelecom Communications. The three sales alternatives being considered are: selling to a strategic buyer, IPO via a common share offering, and IPO via an income trust offering.

Instructor: Seref Turkmenoglu

Seref Turkmenoglu is an engagement manager at Activate Strategy Inc., advising CEOs and senior management teams to position companies for growth mainly in media, technology, entertainment and information industries.

He previously worked in the strategy and business development group at the Walt Disney Company, identifying, analyzing and developing strategic growth initiatives including potential acquisitions and new business opportunities. Prior to that, he served in the corporate development team at MDC Partners where he designed, planned, and executed M&A deals from due-diligence to post-closing integration.

He also held management positions at other prominent companies including The Economist Group and National Grid; developing a cross-industry expertise across advertising, media, consumer products, entertainment, and energy.

He earned an MBA from Troy University and MS from New York University. He is also a Certified Management Accountant.